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St. Francis MINE, CLEVELAND, Lot 25, RANGE 12.--The ore is disseminated in a vein slightly oblique to the stratification of a quartzo-chlo. ritic rock, frequently studded with nodules of orthoclass feldspar, often sur. rounding small centres of quartz; the nodules give to the rock the aspect of an amygdaloid trap. The bed has an average thickness of three feet, and the rock is supposed to occupy a higher stratigraphical place than the Acton dolomite. The vein is traced running N.E. for 90 fathoms. Five or six small excavations, each one of a few fathoms in length, have been made in the outcrop to the depth of two feet, and in these the variegated and vitreous ores are mixed with the yellow sulphuret.
FALLACIES ABOUT SPECIE PAYMENTS. It is the fashion just now to talk of an early return to specie payments. And the desire which all good citizens have to get back to a sound stable currency, leads not a few of us to welcome every down. ward movement in the price of gold, as if it indicated that we were approaching the desired goal of resumption. If the only force which is at this moment acting on gold to depress or raise the premium in the market, were an appreciation of greenbacks, and took its origin in a reform of our paper money, these sanguine expectations would not be devoid of foundation. But it is notorious that gold is exposed in its daily fluctuations in the market to a host of other influences which have no connection whatever with our greenback currency. Hence, the perturbations in the value of gold, so far as they are due to such causes, offer no indication whatever of responsive movements in the value of our paper money. The thermometer ceases to be a register of the heat of your room whenever the rise or fall of the mercury is tampered with, or is governed by other causes than the heat of the atmosphere. So with gold. It is no accurate gauge of the depreciation of the currency, except its daily price can be freed from perturbation by the foreign exchanges, by the import and export movement of specie, by the supply of floating gold on the market, by the prospect of peace or war in Europe, by the movements of our national Treasury, and by a thousand other occult circumstances, which Wall Street seizes upon and makes the basis of calculation, measurement, and speculation. Let us not be misunderstood. We do not say that the price of gold is never, or in no degree regulated by the depreciation of our paper money. What we say is, that this depreciation, this loss of purchasing power, is one force among a multitude of conflicting forces, all of which modify and regulate the market price of gold. The real price of gold, if we could get at it, might measure the depreciation, and would indicate the purchasing power of cur paper money as a thermometer measures degrees of heat or cold; but the real price of gold is not the market price.
The latter is in very great emergencies, very far removed from the former. Thus, in July, 1864, the market price of gold rose to 285, but the real price was much below that figure, as is proved by the tact that the purchasing-power of the greenback-dollar in the hands of the work. ingman who wished to buy with it food or other necessaries was as great when gold was at 285 as some weeks earlier when gold stood at 168, or, as it was last April, when the rate was 125. We might, indeed, with
as much justice, argue that the great law of gravitation is suspended because the sea pours its waters up the Hudson twice a day as to deny the great law that currency redundancy produces currency depreciation because of certain tidal perturbances in market-value which prevent the rate of gold from corresponding exactly with the rate of depreciation. Without arguing the question more at length, then, enough has been said to show the fallacy of the prevalent opinion that whenever, trom any causes whatever, gold is going down in price, we are of necessity improving our depreciated deranged currency or drawing a step nearer to resumption of specie payments.
Another view which is abroad in reference to this subject is that, by hoarding up gold in the Treasury, we shall facilitate an early resumption. We have at present more than seventy millions of Government gold in the Treasury vaults. When we have one hundred and fifty or two hundred millions hoarded up there (if, contrary to belief, there is enough gold in the country to permit us to amass so much without inflicting great mischiefs on commerce), what good will this prodigious store of coin do to us? Suppose, with this one hundred and fitty or two hundred millions, we offer to redeem our legal tenders at par, what would be the natural result? Of these legal tenders we have outstand ing no less than five hundred and fifty-five millions. And how long would our two hundred millions remain in the Treasury? It is easy to see that every holder of greenbacks would hasten to get coin for them. The greenbacks would pour into the Treasury and the gold would flow out in a resistless stream until, at the end, there would remain more than three hundred and fifty millions of green backs outstanding, for which no gold could be got at the Treasury. Now, every man of business must see at once that the spasms produced by such a violent perturbation of the circulating medium would fill the whole country
Bankruptcy and universal stagnation would succeed ; and it would be well if, in the general ruin of our commercial and financial interests, the national debt was not at one stroke swept away. Happily, no such mischievous and suicidal scheme as this was ever adopted by any nation as a remedy for the evils of irredeemable paper money. Certainly, there is in our people too much good sense and general knowledge of history and finance to render it in the least degree likely that in Congress or among our citizens generally this view will ever stand a chance of getting itself into favor, or of exerting an influence in shaping the financial policy of the future.
But, to understand the true remedy and the mode of applying it, we should ask ourselves what is the impediment to our resumption of specie payments ? To this question, the reply is that the redundancy of the currency is the chief impediment. Take this stupendous obstacle away and all others will be of small moment. Contract the volume of the currency to its normal limits, and whatever else is needful will be done with comparative ease. The greatest, the most pecessary, and the first step toward specie payments, is contraction of the currency. Althongh there is no proposition in financial science which is better established than tbis, all kinds of visionary projects for restoring the currency are found in the public press. One of the chief causes of this is the mischief induced by contraction when it is done unskilfully, or at the wrong time. The
first occasion on which this mischief was very prominently brought into view in our recent financial history was in the summer of 1863, when Mr. Chase, persuaded by persons who urged him to give a check to speculation, suddenly locked up in the Treasury a large amount of greenbacks, bastily gathered, by various expedients, in the City of New York. Had the absorbing of this money been slow, or had an adequate previous notice been given, the equilibrium would bave been less violently disturbed. As, however, this previous notice would have defeated the object in view, the movement was made suddenly, and fell like a thunderbolt from a clear sky. A panic was produced which will be long and sadly remembered in financial circles. A few speculators were made rich by it, but thousands were impoverished, and it was estimated at the time that the loss by depreciation of property was 106 millions of dollars. Ever since this period, we have had in the popular mind such a dread of contraction of The circulation, that there has been a readiness to listen to any proposals for returning to specie payments without this indispensable condition. All these schemes, however, as we have said, are absurd, and attempt an impossibility. Never in the history of nations has any depreciated currency been restored to par except by contracting its volume. As well might a boat attempt to go from Lake Erie to the sea without descending the whole depth of the Falls of Niagara.
This, then, is the difficulty. Contraction of the currency is necessary. But to contract violently is impossible. To make the leap at once would enguiph the whole country in bankruptcy. We must, therefore, take the next best means. As we cannot descend to the level we want at one plunge, we must be content to do it by graudual degrees. As a vessel may safely go down by a series of locks to any required depth, in its transit from the lakes to the sea, so may our financial barque, if well piloted through the successive slow movements which are needful, gradually reach the desired baven of resumption. There is then a right way and a wrong way to contract the currency. The wrong way is to make the plunge suddenly, and its end is inevitable failure. The right way is to diminish the volume of our circulating money by slow degrees. This is the way decided on by Congress, in prohibiting a greater reduction than four mil lions a month. And, if preserved in, this safe course will bring us to specie payments in less time, and with less danger of revulsion and panic, than any other.
If the testimony of history were not so full and complete that neces-. sity of contraction is necessary to resumption, we might infer it from the fact that depreciation is produced by redundancy. Neither French Assignats, the Continental currency, nor our own greenbacks, depreciated noticeably in value till they were issued in excess. Now, depreciation being caused by redundancy, a recovery from the morbid state is to be realized only by removing the cause that is, by correcting the redundancy. Of our paper money, a sufficient amount must be withdrawn to make the aggregate what it would be on a coin basis. This normal amount is not fixed and rigidly stationary. Like the current of the Mississippi, it varies responsively to various causes at different parts of the year. But it varies within bounds which are ascertainable and self-regulating. How much currency we should want were the paper dollar equal w ten dimes in coin, cannot be discovered by referring to the period be
fore the war and the suspension of specie payments. At that period two huodred millions were enough. During the last five years we have vastly expended our financial operations, our mercantile enterprises, and our productive industry. There is more need therefore, and more use for the circulating medium. The amount which is now required bas been estimated at three hundred millions, and it probably could not safely exceed four hundred millions without being reduced in purchasing power below the level in coin.
In England the average amount of current money is under 250 millions of dollars ; in France under 300 millions. But the babits of various countries differ so widely as to the methods of doing business and of economising currency, that vo certain conclusion can be reached, save by ex. perience. From what has been said, however, three or four conclusions are sufficiently clear. First, a large amount of our 800 millions of active paper money must be withdrawn before we can get down to the level of specie payments. Secondly, if high prices necessitate the use of a large volume of currency, and redundant currency therefore puts prices up, the converse is true, and a permanently contracted currency will produce permanently lower prices for real estate, merchandise, and all other commodities. "Thirdly, the contraction being gradual, and extending itself over a series of years, the shrinkage in prices will be almost insensible, or may, at any rate, be adjusted with such quietude as to do but little barm. Fourthly, the debtor classes of our population, who will suffer by contraction, are those which are mostly sensitively exposed to pecuniary injury, and which suffer most severely under it. Hence the necessity for caution as to every successive step we advance in the path of contraction.
In view of these facts there is the most anxious watchfulness over any of Mr. McCulloch's movements which seem to look towards interference with the currency. His power to call in greenbacks is limited by Congress to 48 millions a year. He may withdraw less than this sum, but he is not permitted to withdraw more. But there are other parts of the currency over which Congress bas left him unlimited power. The compound interest legal tenders he can withdraw as fast as he can buy them at par, first cost. If the price were not two per cent above par he would bave ihe ability to act on the currency by bringing these notes, which are largely beld by the banks as reserve instead of other legal tengers. Being so beld as reserve the perform one of the functions of currency, and thus do the duty of a certain amount of greenbacks, which are released for active use in the current of circulating money. We doubl the policy of paying off the Clearing House certificates, which have been held by the banks at four per cent inierest. Forty five millions of currency are thus being thrown into the banks, and they will be tempted to lower their restrve, and either to lend their surplus funds in discounting rashly, or to invest for speculative purposes. This lowering of the reserve is obviously a weakening of the position of the banks. At present they huld considerably more of legal tenders than the twenty-five per cent. reserve required by law. Some of the reasons why we have bad so swift a recuperative movement after the monetary spasms wbich bave visited us, is to be found in this extraordinary strength in the reserve funds which constitute the buttresses and bulwarks of our financial editice. Two of the most powerful inducements which have led and enabled the banks to strengthen
themselves with so ample a reserve, are found in the compound interest notes and the Clearing House certificates. We have, consequently, grave doubts whether it is safe and wise at the present moment for the Secretary of the Treasury thus to disturb the currency. Contraction is a good policy, a necessary policy, but it must be timely, not at the active period of the year, and it should be slow. At the same time every inducement should be held out to our banks to increase this reserve.
TRADE OF GREAT BRITAIN AND THE UNITED STATES.
COTTON, BREADSTUFFS, PROVISIONS, ETC. Notwithstanding the Bank rate of discount was at 10 per cent. during the month of July, the English Board of Trade returns for that month, which we have just received, present many favorable features. As regards that country, the results show most conclusively the importance of the trade between us and Great Britain, although it must be borne in mind that transactions would not have been on the extensive scale reported had no fears been entertained in England that higher rates of import duty might be imposed in this country. Future business has, therefore, been anticipated, and for that reason, in part, is so extensive a trade exhibited during the months of May, June and July.
The declared value of the imports of British and Irish pruduce and manufactures during the seven months ending July 31 was £107,815,664, against £38,242,048 last year, and £92,441,950 in 1864. There is, therefore, an increase during the present year, as compared with 1865, of £19,600,000, and of £15,400,000 as compared with the corresponding period in 1864. For each of the seven months in each of the last three years the figures stand thus :
£10,413,586 £10,489,339 £14,354,748 February
12,698,121 1:,376,214 15,116,068 March
13,555,674 13,770,154 17,520,354 April
13,225,039 12,071,111 15,366,414 May
14,176,640 13.194,758 15,870, 131 June
13,978,526 18, 227,042 14,630,120 July
14.394,364 14,118,410 14,957,834 Total
£92,441,950 £88,242,048 £107,815,664 The computed real value of the principal articles imported into the United Kingdom, during the six months ending June 30, was rather more than £30,000,000 sterling greater than in the corresponding period in 1865, and £16,600,000 in excess of 1864. This great increase is chiefly to be accounted for by the augmented importation of cotton from this country. The figures for each munth are subjoined :
1866. In January...
£7,520,856 L6,398,922 £9,847,564 February
15,214,541 12,891,252 16,610, 159 March..
16.396,928 13.005,394 19,891,204 April...
17,587,565 13,078,755 22,455,968 May.
22,392,601 14.595,334 23, 224,762 June..
21,498,185 15,407,688 23,243,701 Total
£98,610,176 £75,340,872 £115,273,368 As regards the United States, the value of the outward trade in British and Irish produce and manufactures from Great Britain, for the month of June and for the six months ending June 30, was as under :